Green Credit Programme (GCP)

April 18, 2024

Why in News?

Amid concerns that the GCP may encourage tree planting for financial gains, the Union Environment Ministry (MoEFCC) has issued guidelines that States must rely on to calculate what it would cost to restore a degraded forest landscape.

What’s in Today’s Article?

What is the Green Credit Programme (GCP)?

Green Credit Initiative was launched by the Indian PM on the side-lines of COP 28 (held in 2023 at Expo City, Dubai, United Arab Emirates).
It is an initiative within the government's Lifestyle for Environment (LiFE) movement.
- The concept of LiFE was introduced by the Indian PM at COP26 (Glasgow) in 2021, to drive an international mass movement towards “mindful and deliberate utilisation” to protect and preserve the environment.
The GCP introduces a market-based approach to incentivise 8 identified environmental activities.
The main objective was to establish a mechanism where participants could earn incentives in the form of ‘Green Credits’.
The proposed GCP will be implemented in phases, with the initial phase focusing on water management and afforestation.
Subsequent phases will cover activities such as
- Sustainable agriculture,
- Waste management,
- Air pollution reduction,
- Mangrove conservation and restoration,
- Eco mark label development, and
- Sustainable building and infrastructure.

What are the Green Credit Rules, 2023?

These rules were notified on 12th October 2023 under the Environment Protection Act 1986.
These rules put in place a mechanism to encourage voluntary environmental positive actions resulting in issuance of green credits.
In its initial phase, voluntary tree plantation is envisaged on degraded land, waste land, watershed area, etc., under the control and management of Forest departments.

Implementation of the GCP:

So far, forest departments of 13 States have offered 387 land parcels of degraded forest land - worth nearly 10,983 hectares.
Individuals and companies can apply to the Indian Council of Forestry Research and Education (ICFRE) - an autonomous body of the MoEFCC, to pay to restore these forests.
- The actual afforestation will be carried out by State Forest departments.
Two years after planting and following an evaluation by the ICFRE, each such planted tree could be worth one ‘green credit.’
These credits can be claimed by the financing organisation and used in two ways:
- Either using it to comply with existing forest laws that require organisations, which divert forest land for non-forestry purposes, to recompense by providing an equivalent amount of land elsewhere.
- Or be used for reporting under environmental, social and governance leadership norms or to meet corporate social responsibility requirements.

Concerns Regarding the GCP and Changes Made by the Latest Guidelines:

According to sources, the green credits were not tradeable.
- However, the notified 2023 rules of the GCP says that the programme aims to incentivise environmental positive actions through market-based mechanisms.
- The green credit shall be tradable and made available for trading on a domestic market platform.
- It adds that if generating green credits led to measurably reducing or removing carbon emissions, it could also be used to get carbon credits, which are currently traded via several other independent markets.
According to the latest guidelines, States must rely on to calculate what it would cost to restore a degraded forest landscape.
- The Ministry has changed the earlier requirement that there be a minimum of 1,100 trees per hectare to qualify as reforested landscape and left it to States to specify them.

See All